Total liabilities dropped 3.7 percent last year, causing the ratio of liabilities to capital and surplus to reach 2.8 — up from 2.4 in 2007. This substantial increase in relative leverage is again the direct result of the decline in shareholders’ equity. Though 2008’s leverage position was much higher than that of 2006 or 2007, it is generally consistent with 2004 and 2005 levels.

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